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for a gas card than it is to qualify for a home loan? Like 
many, you may have already disqualified yourself from buying 
a home due to bad credit. Little do you know, you may be 
considered an "A" buyer by many brokers and lenders. Even if 
your bad or insufficient credit disqualifies you as an "A" 
buyer, a home loan at standard interest rates may still be 
within your reach. Homes are very secure collateral.  
Because of this, the lenders feel more comfortable lending 
you money against the property. As opposed to unsecured 
credit lines, the lender will be primarily interested in 
your job security, debt to income ratio, and ability to pay 
a reasonable down payment. Your credit report will only 
represent minor role in your mortgage approval. On the other 
hand, much depends on the mortgage broker whom you choose. 
For example, you may walk into a bank, apply for a mortgage 
loan, and be turned down flat.  
On the same day, you could step into the office of an 
independent mortgage broker, and he will pre-approve you for 
an "A" mortgage. Each mortgage broker uses one or more 
lenders to fund the home loans which come to him. The 
mortgage broker's job is to match you with the appropriate 
lender. For this service, you or the home seller will pay 
the mortgage broker "points". These points are equal to 
percentage points of the loan amount. If you are paying your 
broker "2 1/2 points" on a $120,000 home loan, that will 
come to a $3000 payment to the broker.  
There is nothing wrong with making the mortgage broker (and 
your real estate agent) earn their fees. Almost invariably, 
there will be problems that arise with your mortgage. Your 
mortgage broker and real estate agent are responsible for 
coming up with creative solutions to those problems. Some 
mortgage brokers will look at your less-than-perfect credit 
and suggest that you accept a "B", "C", or "D" paper 
mortgage. This means that the loan will require a larger 
down payment, a higher interest rate, better debt to income 
ratio, and, of course, more points for the mortgage broker. 
These high-risk loans are not very good deals. Many times, 
with the right mortgage broker, you could've qualified for 
an "A" paper mortgage.  
Remember, a very small difference in your interest rate will 
cost you tens or hundreds of thousands of dollars. Do 
everything in your power to qualify as an "A" paper lender. 
Even if your broker encourages you to go with the high-risk 
mortgage, don't cave in. You have other options. Certain 
negative credit items can kill a home mortgage. A bankruptcy 
that has taken place in the last one year usually represents 
a deal-killer. With some mortgage brokers bound by less 
permissive guidelines, even a two year bankruptcy will kill 
the deal. The good news is that the right lender wont care 
if you declared bankruptcy as long as it is at least one 
year old. Any unsatisfied court record, such as a tax lien 
or judgment, will become an obstacle to your loan.  
Sometimes, if you can just show your broker that you have 
satisfied the lien or judgment, they will forgive one court 
record. Otherwise, you will need to restore your credit a 
little before you apply. Any kind of outstanding, delinquent 
debt will pose a major obstacle. Even if you have paid the 
debt within the last twelve months, it will probably still 
be a problem. Unpaid collections, charge-offs, deficiencies 
on a repossession, remaining balance on a foreclosure will 
all destroy your chances of "A" paper. If you go to pay the 
debt immediately before you go to get a home, the creditor 
who you are paying will not likely agree to remove the "Paid 
collection" listing on your file. In order to pay 
outstanding, delinquent debt such as this without 
jeopardizing a home loan, you will require the assistance of 
an attorney.  
The best solution is to simply settle the debt a year before 
you intend to apply for a mortgage (see Eliminate existing 
debt. ) If you do this, the "Paid collection" notice will be 
one year old when you go to apply and the right mortgage 
broker will be able to get you into "A" paper. A foreclosure 
in your past is the ultimate black mark when you're applying 
for a home loan. If you have a foreclosure, you will need to 
delete that listing from the credit report before you can 
qualify for "A" paper (See Restore bad credit.) Any late 
pays that have happened within the last year will also 
present a problem.  
You can usually explain one or maybe two thirty-day late 
pays, but if you have more, you will need help getting them 
removed. You can try to contact the creditors reporting the 
late pays and ask them to remove the listing. If you have a 
decent reason why the late pay is a mistake, then the 
creditor might delete the item for you. Do not bother to 
tell them why you were late. They will not care what 
happened to you. Your only salvation will be to convince the 
creditor that there was a mistake and that, by some logic, 
it was their fault that you were late. If you aren't making 
progress with your creditors, you will need the help of an 
attorney. You will be amazed at how easily a law firm can 
get your creditors to come around to your way of thinking. 
When a mortgage broker prepares your file for the 
underwriter (the lender), he will use a Standard Factual 
Report to check your credit.  
The Standard Factual company can aid in the deletion of 
negative credit listings. If you get a creditor to agree 
tore move a derogatory listing, all you need is a letter or 
a phone call from the creditor to the Standard Factual 
company and the derogatory credit item will disappear from 
the Standard Factual report (not the credit report, though.) 
Most lenders will allow several negative items if you can 
adequately explain them. But, they only want to hear 
explanations that are medically related. If you can show the 
lender where an accident or illness caused a late pay or 
collection, they may let the derogatory listing slide. The 
good news is that any satisfied, derogatory credit listings 
that are over one year old (besides a foreclosure) can be 
overlooked by a lender. Any problematic derogatory listings 
can usually be overcome by you or a practiced law firm.  
Don't accept high-risk paper until you have exhausted all of